Can Ethereum Bounce Back from Brutal Sell-Off? Here’s What the Charts Say

Ethereum (ETH) continues to move sideways in the $1,600 area, as trader monitor trade war headlines and commentary from Fed policymakers, and wonder whether the crypto might soon recover from its brutal sell off.

Following volatility that saw Ethereum drop from highs close to $2,000 earlier this month to lows under $1,400 last week, ETH price action has calmed in recent sessions.

However, chart analysis still paints a bearish picture. Ethereum continues to trade below its major moving averages, including its 21DMA which has offered strong resistance in recent months.

Some analysts, including popular analyst Ted Pillows, think that a near-term breakout could be coming.

$ETH is getting closer to a breakout.

Global markets are gaining some strength, so expect Ethereum to hold the $1,550-$1,600 level.

For now, I'm hoping for a breakout above and close above $1,670 for a rally towards $2K. pic.twitter.com/qVsWLKK82n

However, against the backdrop of continued macro uncertainty, betting on a major rebound right now would be risky.

Fed Chair Jerome Powell on Wednesday highlighted the risk that Trump’s trade war risks simultaneously hurting economic growth and pushing inflation higher, putting the Fed in a tricky situation.

BREAKING: Fed Chair Jerome Powell just announced that Trump's tariffs are larger than anticipated and they may put the central bank in a challenging situation “not seen in decades.”

TRUMP DID THIS! Not Biden.

pic.twitter.com/LXTIPpcIdJ

These remarks were interrupted as “hawkish” by some analysts, and as a signal the Fed will be in no rush to cut interest rates to support a weakening economy/falling markets.

Risks remain tilted towards further losses for risk assets like stocks and altcoins (like ETH) in the weeks and months ahead.

Ethereum’s near-term outlook may be bearish, but could the crypto be gearing up for a major recovery?

Mister Crypto noted on X on Wednesday that ETH has fallen back below its realized price, which he called “an amazing buying opportunity”.

Indeed, investors who bought as ETH neared or fell below its realized price in recent years would have made a tidy profit.

This time is unlikely to be any different. Ethereum remains the dominant DeFi chain, still way ahead of its closest rivals like Solana or Tron in terms of total value locked in smart contracts.

Ethereum is dead pic.twitter.com/GxYYjFLGeb

And with Ethereum clearly a favorite in the pro-crypto Trump administration (Trump’s family are HODLers), Ethereum has all the narratives it needs to dominate when the crypto market starts to recover.

So when might that be? Well, prior alt-coin seasons have taken place when central banks (led by the Fed) have been pumping liquidity and uncertainty about the economy has eased.

I.e. situations where there has been a crisis, but the Fed (and other central banks) has responded with lots of liquidity and the crisis has eased.

We aren’t yet at this point. First, we still need to have the crisis (i.e. a tariff induced recession), then a decisive Fed response (zero interest rates and QE). Then it would be time for alt-season.

In the meantime, savvy investors would do well to continue accumulating Ethereum at discount prices. ETH is very likely to hit new record highs before the end of Trump’s four-year term, which is over 3x above current levels.

Investors would also do well to accumulate one of Ethereum’s biggest rivals, Solana.

The Solana blockchain is a way of matching Ethereum’s dominance, but its proven itself as the go to blockchain for retail trader activities like meme coin trading.

That gives it a strong narrative to power a comeback when macro conditions improve. Solana could easily 3x from current levels prior to the end of the Trump administration’s four-year term, just like ETH.

That said, an exciting new Solana project called Solaxy (SOLX) could do even better.

Solaxy, the first layer-2 Solana scaling blockchain, has been making waves since the launch of its presale earlier this year.

With over $30 million in funds raised for ecosystem development, Solaxy looks set to mark one of 2025’s biggest token launches.

The $SOLX spaceship is picking up speed!

30M Raised! pic.twitter.com/qvrYUwt2Sy

That’s exactly the kind of early momentum a budding new project needs to get its ecosystem off of the ground and become a long-term success.

To learn more about the project and its exciting presale, readers can follow Solaxy on X and Telegram.

Solaxy’s smart contract has already passed major audits, including with Coinsult.

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